The corporate parent of Commonwealth Edison is warning that the utility could be forced to file for bankruptcy if the state doesn’t come up with a reasonable way for it to procure electricity.
“We are taking concrete steps to address the possibility of either an ultimate bankruptcy of Commonwealth Edison or an ultimate separation” of the utility, Exelon Corp. Chief Executive John Rowe told an investors conference in New York Wednesday.
ComEd is proposing to buy power at auction beginning in 2007. Residential electric bills are expected to jump 20 percent or more, a development likely to anger Illinois consumers who have enjoyed a rate freeze for nine years.
Rowe’s warning that Exelon will divest ComEd or see it in bankruptcy is a response to Gov. Rod Blagojevich, Atty. Gen. Lisa Madigan, the Citizens Utility Board and others who oppose the idea of an auction. None of the opponents have offered an alternative way to procure electricity.
The governor’s office showed no sign of backing down Wednesday.
“This is a debate over what is best for the electricity consumers in Illinois, not what is best for Exelon,” said Abby Ottenhoff, a spokeswoman for the governor.
“It is unfortunate they are so willing to harm Illinois consumers in their endless quest for even higher profits.”
As part of the deregulation of Illinois’ electric utility industry, ComEd must buy power from generating companies and from its unregulated affiliate, Exelon’s nuclear fleet, beginning in 2007. ComEd has no generating capacity, but Chicago-based Exelon is the largest operator of nuclear plants in the country.
ComEd’s proposal would require the approval of the Illinois Commerce Commission. In late August, Blagojevich sent the commissioners a letter warning they would be replaced if they voted for the auction. Exelon circulated copies of the letter at Wednesday’s conference.
“The governor’s letter … basically told the commission to ignore both the facts and the law and not to give rate increases,” said Rowe, who this month called the letter “a death spiral for Commonwealth Edison.”
Last week Blagojevich hammered his lesson home by replacing ICC Chairman Edward Hurley with Martin Cohen, then the executive director of CUB, the state’s largest utility watchdog. Cohen has in the past opposed any big increase of electric rates.
Rowe noted that the threat of more expensive electricity comes as natural gas and gasoline are at or near record highs.
“That creates both political pressure and political opportunism,” he said.
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rmanor@tribune.com
